Fraud Exam 1

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  1. What is the most critcal element for fraud to be successful
  2. Four basic sources for statistics on how much fraud is occuring are all of the following except:
    Auditing firms
    Government agencies
    Insurance companies
    Victims of fraud
    Auditing firms
  3. Which of the following is incorrectly connected?
    Employee embezzlement - use positions to take assets belonging to an employer
    Customer fraud - obtain the confidence of customers to get them to invest money
    Vendor fraud - overbill or provide lower quality or fewer goods than agreed
    Management fraud - manipulate the financial statements to make the company look better
    customer fraud
  4. Who is the main victim of customer fraud
    organization which sells to the customers
  5. ____ often called financial statement fraud and involves top management's deceptive manipulation of financial statements
    Management fraud
  6. Losses incurred from fraud reduce a firm's income on a dollar for dollar basis. This means that for ever $1 of fraud, ____ is reduced by $1
    Net income
  7. What does criminal law differ from civil law
    deals with offences of a public nature
  8. which of the following is not a fraud type
    auditor fraud
  9. Which of the following is not a requirement for an individual to become a certified fraud examiner:
    Be an associate member of ACFE in good standing
    Meet minimum academic and professional requirements
    Agree to abide by the Bylaws and code of professional ethics of the ACFE
    None of the above
  10. Which of the following is not an element of fraud?
    Unintentional results
    Representation of an existing fact
    Its materiality
    Consequent damages suffered by plaintiff
    unintentional results
  11. What comprises the fraud triangle?
    Pressure, rationalization, opportunity
  12. When committers of fraud are not reported and prosecuted they are likely to
    continue committing fraud
  13. Which of the following is not one of the 5 types of power discussed in the chapter?
  14. People who commit fraud
    are usually trusted by others
  15. Common pressures for committing fraud include:
    Unexpected finanical needs
    Living beyond one's means
    All of the above
    All of the above
  16. Audit trails are important because:
    They help transactions to be understood
    They help hide fraud
    They help hold people accountalbe
    • They help transactions to be understood
    • They help hold people accountable.
  17. When an organization catches someone committing fraud it usually
    dismisses them without further action
  18. Work related pressures to commit fraud include
    fear of losing job
    dissatisfation with job
    feeling undervalued
    all of the above
  19. Fraud is more easily committed when:
    One person has more information than the other
    Both people have equal amounts of information
    When there is trust between two people
    A & C
  20. Common types of vices are:
    Extramarital affairs
    All of the above
  21. Which of the following is not an element of the fraud triangle?
    Ethical Lapse
    Ethical Lapse
  22. Proper modeling by upper management in the creation of the business culture of a company is an example of
    setting the tone at the top
  23. Which of the following is not a primary way to detect fraud?
    By chanceions
    providing a fraud reporting system
    examining transaction records
    random investigat
    random investigations
  24. The circumstances that would lead a reasonable professional to believe that fraud has occured, is occuring, or will occur is:
    predication of fraud
  25. Fraud investigations should be:
    Carefully conducted
    Approved by management
    Conducted only when predication is present
    all of the above
  26. Actions taken after an occurrence of fraud in order to revocer mondy or other assets from the fraud perpetrators describes:
    Civil action
  27. Of civil and criminal action which is more difficult to get and why?
    Criminal; there must be proof that the perpetrator intentionally stole the assets
  28. Which of the following is the most cost effective way to reduce losses from fraud?
    Fraud prevention
  29. Which of the following is not considered a classification of investigation techniques for fraud?
    Investigation of transactions
  30. Which of the following is not a part of the fraud element triangle?
  31. EAP stands for
    Employee Assistance Program
  32. Employers cannot be held legally responsible for negligent acts of an employee
  33. Creating a positive work environment includes all of the following except:
    Expecations of honesty through Code of Conduct
    Open door policies
    resume verification
    positive personnel and operating procedures
    resume verification
  34. The average ROI for EAP is
    Difficult to prove
  35. The following are all examples of preventive controls EXCEPT
    segregation of duties
    system of authorizations
    physical safeguards
    independent checks
    independent checks
  36. SAS No. 99 requires auditors to
    brainstorm for possible fraud opportunities
  37. What percent of frauds involve collusion
  38. Successful whistel blowing systems include
    follow up
    all of the above
  39. What is the problem with the current model of dealign with fraud
    fraud will never decrease
  40. Individuals who commit fraud usually do what with the stolen money
    support habits
  41. Which one is not a symptom of fraud
    tips and complaints
    internal control weakness
    accounting anomalies
    inadequate management
    inadequate management
  42. who is in the best position to detect fraud
    other employees
  43. which one is not an example of an accounting anomaly:
    inaccuracies in the ledger
    unexplained inventory shortages
    stale items on banke reconciliations
    ournal entries not balancing
    unexplained inventory shortages
  44. Which of the following is a fraud symptom related to an internal control weakness?
    Lack of proper authorization
    Lack of independent checks
    Inadequate accounting system
    Lack of physical safeguards
    All of the above
  45. Which of the following is NOT a fraud symptom related to journal entries?
    Unexplained adjustments to receivables, payables, revenues, or expenses
    LackĀ  of segregation of duties
    Lack of independent checks
    Overriding of existing controls
    Unexplained adjustments to receivables, payables, revenues, or expenses
  46. If a perpetrator has stolen assets, what is the easiest method for concealing the theft
    increase expenses
  47. Who is in the best position to detect fraud
  48. Which of the following are examples of behavior changes of fraud perpetrators?
    Increased drinking
    Inability to relax
    Unusual belligerence
    all of the above
  49. What fraud symptom is characterized by an individual living above their income
    extravagant lifestyle
  50. What is the best description of a psychopath
    commits bad acts and feels no guilt
  51. Which of the following is not a benefit associated with data-driven fraud detection:
    Permits full-population analysis
    Provides a proactive approach to fraud detection
    May detect frauds while they are still small
    Generally less expensive and less time intensive
    Generally less expensive and less time intensive
  52. Which of the following is not a step in the data analysis process:
    Understand the business
    Identify possible frauds that could exist
    Gather data about Symptoms
    Confront employees who exhibit symptoms of fraud
    confront employees who exhibit symptoms of fraud
  53. Open Database connectivity is usually the best way to retrieve edata because
    It allows for SQL when searching and filtering
  54. Benfords law states that:
    Natually occurring numbers that begin with 1 have the greatest probability of occurence
  55. Time trend analysis is useful in detecting fraud because
    fraud tends to increase in size over time
  56. An outlier would not be produced by which of the following:
    A reoccuring order for office supplies
  57. What are the primary benefits of using a Matosas matrix
    It allows multiple indicators to be combined for uses of different scenarios
  58. What is financial statement reporting analysis
    Highly summarized financial statement used for data driven analysis
  59. Which is not one of the four ways balance sheet and income statement can be changed to a change statements?
    Horizontal analysis
    Calculating key ratios
    Comparing different statements overtime
    Both A and B
    Comparing different statements overtime
  60. What statements are balance sheets and income statement respectively
    Position and period
Card Set:
Fraud Exam 1
2012-09-12 05:10:44
Fraud Exam

Fraud Exam 1
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